Lots of charts this week with just some brief commentary about the market that is not trading “properly”. There is a slight odor beginning to emanate from price action though not sure what it is. Looking at the weekly chart above– it looks like a solid bull run with little or no correction for the last 8 weeks– that is not normal behavior (especially for natural gas). Some fundamental based traders tell me it is concerns about supplies going into the upcoming winter — at face value the market is not confirms such concerns. Look at the chart below:
The blue line reflects the upcoming Jan ’22 contract and has narrowed on the recent run to only $.13 over August. That does not reflect substantial concerns about the upcoming winter supplies. Much less– it takes the value of storage off the table as it doesn’t cover the carry costs much less the direct cost of storage. Winter should be rising at the pace of cash (or Aug) if winter was an issue. Perhaps it too will run later in the fall. When Aug corrected (very briefly) early in July the spread was out to $.20 which does reflect some concerns (prompt declines – winter declines less).